Naira Strengthens to 15-Month High of ₦1,490 per Dollar on Parallel Market as FX Demand Eases
Story: written by Okafor Joseph September 25,2025
The Nigerian naira surged to its strongest level in over a year on Wednesday, September 24, 2025, trading at ₦1,490 per dollar in the parallel market. The rally was attributed to subdued foreign exchange (FX) demand and improved liquidity across Nigeria’s currency markets.
This marks the first time since June 2024 that the naira has reached the ₦1,490 threshold. Compared to Tuesday’s closing rate of ₦1,515 per dollar, the currency appreciated by ₦25 or 1.67%.
The narrowing gap between the parallel and official exchange rates—now just ₦1.44—has raised hopes of greater convergence in Nigeria’s FX market.
At the Nigerian Foreign Exchange Market (NFEM), however, the local currency weakened marginally by 0.08%, settling at ₦1,488.56 per dollar, compared to ₦1,487.36 on Tuesday, according to Central Bank of Nigeria (CBN) data.
Impact of CBN’s Policy Shift
The movement comes days after the Monetary Policy Committee (MPC) of the CBN cut the Monetary Policy Rate (MPR) by 50 basis points to 27.00%—its first reduction in more than two years. The adjustment reflects a shift from the prolonged tightening cycle aimed at curbing inflation and stabilizing the naira.
Analysts at Comercio Partners noted that while the rate cut is unlikely to cause immediate volatility, it may support short-term stability. They emphasized that the naira has traded within a relatively narrow band of ₦1,500–₦1,600 in recent months, aided by CBN interventions, stronger external reserves, and closer monitoring of FX flows.
Outlook and Risks Ahead
Market experts caution that the naira’s resilience will depend on the CBN’s ability to sustain interventions and attract FX inflows from oil exports, diaspora remittances, and foreign portfolio investments.
“Overall, the policy shift reinforces short-term stability in the FX market but underscores the importance of sustaining external buffers and credible reforms to mitigate volatility risks in the months ahead,” Comercio Partners stated.
Analysts warn that if monetary easing outpaces inflows or if reserves face renewed pressure, the naira could come under fresh depreciation risks—particularly in the parallel market, where speculative demand remains high. In such circumstances, the CBN may need to recalibrate interventions and strengthen fiscal-monetary coordination to preserve market confidence.
